The Securities and Exchange Commission has taken its first actions against robo-advisers, settling Friday with two of these companies over misleading customers.

The SEC settled for $US250,000 with Wealthfront, the second-largest robo-adviser behind Betterment, and for $US80,000 with Hedgeable, a now-defunct robo adviser. Both companies, which provide automated investing services to clients, were charged with violating rules on antifraud, advertising, and compliance.

Last year, the SEC issued robo-adviser-related guidance for investors, highlighting the need for effective compliance programs, among other concerns.

“Technology is rapidly changing the way investment advisers are able to advertise and deliver their services to clients,” said C. Dabney O’Riordan, the head of the SEC’s asset management enforcement division, in a statement on Friday. “Regardless of their format, however, all advisers must take seriously their obligations to comply with the securities laws, which were put in place to protect investors.”

From October 2012 to mid-May 2016, Wealthfront told clients it would monitor their accounts to avoid any deals that would trigger a “wash sale,” in which an investor sells a security at a loss and within a month, buys the same security. The wash sale prevents the tax benefit of selling the security to realise a loss.

The SEC said that until mid-May 2016, Wealthfront didn’t monitor accounts to avoid the wash sale. In that 2012-2016 time period, about 31% of accounts experienced some wash sales. If those sales had not occurred, clients would have been able to offset more of their losses.

The SEC also said that Wealthfront re-tweeted testimonials that were not published with required disclosures, and that the company paid bloggers for client referrals without required disclosure and documentation.

“We take our regulatory duties seriously at Wealthfront and are happy to have reached a settlement with the SEC,” Wealthfront said in a statement.

The firm noted that between January 1, 2014 and December 31, 2016, wash sales comprised about 2.3% of harvested tax losses, leading the average client to receive 5.67% of the total annual harvesting yield versus 5.8%.

Wealthfront agreed to communicate the settlement to its clients and certify compliance with the SEC, along with paying $US250,000 to the SEC.

‘Not an apples-to-apples comparison’

Meanwhile, Hedgeable – which removed its SEC registration in August as founders Michael and Matthew Kane turned their attention to a separate blockchain company – settled with the SEC over misleading statements about its investment performance. Both founders declined to comment.

Before the company wound down its advisory business, it had about $US80 million in assets from 1,698 clients, according to a filing with the SEC.

According to the settlement, from 2016 to April 2017, Hedgeable posted comparisons of its performance and those of two competitors that were not “apples-to-apples comparisons,” according to the SEC.

Hedgeable also failed to maintain required documentation and a compliance program that would prevent securities laws violations, the SEC said.